China awaits textile pact fine print
(Reuters)
Updated: 2005-11-09 00:35

Clarity

Many Chinese-based manufacturers said they welcomed an end to uncertainty but were waiting for the Ministry of Commerce to explain the quotas.

"The deal is good for us, because it removes uncertainty for buyers," said Zuo Quntao, a manager at the Weida Garments, a shirt maker in the eastern Chinese province of Zhejiang that exports nearly all its shirts.

But Zuo said that Weida and other exporters had not seen the details. "For real buyer confidence, we need to know the details of how quotas will be allocated," he said.

While some manufacturers welcomed the deal, other manufacturers said that if the quotas threatened growth, they may move some production to Southeast Asian countries, or use those countries for final processing so orders escape quota restrictions.

"We've mostly remained outside the limits. We've been using other countries in Southeast Asia to transfer shipments," said a sales manager at Aotin Enterprise, a clothes exporter in the far southern province Guangdong, who gave his surname as Luo.

The deal came after five months of grinding negotiations between China and the United States. Washington imposed quotas after U.S. manufacturers and trade unions complained that cheap Chinese clothes threatened their survival.

Chinese textiles and clothes exports grew to $13 billion in the first months of this year, a rise of 65.5 percent on the same period last year.

In the deal, the United States said it would exercise "restraint" in using "safeguard" limits on Chinese textiles. But Fan Dabiao, the general manager of Soho International, a clothes exporter in eastern China, said he was worried about more restrictions.

"The U.S. promised only to exercise restraint, so who knows what the variables may be in the future," he told the Chinese-language International Business Daily.